​Given the Following Information, Construct the Firm's Cash Budget for the Given

question 8

Essay

​Given the following information, construct the firm's cash budget for the given months. a. 75 percent of sales are for credit, and collections occur after thirty days.
b. A $\$ 100,000$ Treasury bill matures in March.
c. Monthly fixed disbursements are $\$ 14,000$ .
d. Variable disbursements are 62 percent of sales and occur one month prior to sales.
e. A tax payment of $\$ 13,500$ is due in February.
f. The initial cash is $\$ 20,000$ .
g. The minimum required cash balance is $\$ 5,000$ .
h. Variable cash disbursements are given for April.
$\begin{array} { l c } & \text { January } \\ \text { Sales } & - \\ \text { Cash sales } & - \\ \text { Collections } & - \\ \text { Other receipts } & - \\ \text { Total cash receipts } & - - \end{array}$
$\begin{array} { l l } \text { Variable } & 30,000 \end{array}$
disbursements Fixed di sbursements
Fixed disbursements
Total cash disbursements
Net change during the month
Beginning cash
Ending cash
Required cash
Excess cash to invest
Cash borrowed

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Definitions:

Dividends

Money disbursed by a firm to its stock owners, often as a share of profits.

Noncumulative Preferred Stock

Type of preferred stock that does not give the holder the right to claim dividends missed in the past.

Preferred Dividends

Regular payments made to preferred shareholders out of the company's profits before any dividends are paid to common shareholders.

Weighted Average

A calculation that takes into account the varying degrees of importance of the numbers in a data set, assigning more weight to some numbers and less to others.